Judge rules ReDigi music resale service infringes copyright

The Judge ruled that it was illegal to resell a pre-owned music file unless sold with the device onto which it was downloaded

By John Ribeiro | 02 April 13

Selling a pre-owned digital music file is quite different from selling an old CD in the physical world, and may infringe copyright, a court in New York has ruled.

The court questioned a defense under the first sale doctrine in situations where a copy of the digital file is made when making a transfer. The first sale doctrine is the law that protects an user's ability in most cases to lend, sell, or give away copies of books, music and other copyrighted works without requiring the permission of the copyright owner.

The fact that a file has moved from one material object -- the user's computer -- to another -- the ReDigi server -- means that a reproduction has occurred, Judge Richard Sullivan of the U.S. District Court for the Southern District of New York wrote in his order.

"Similarly, when a ReDigi user downloads a new purchase from the ReDigi website to her computer, yet another reproduction is created. It is beside the point that the original phonorecord no longer exists. It matters only that a new phonorecord has been created," he added.

Capitol Records filed a complaint against ReDigi in January last year, alleging multiple copyright violations. The judge said in his ruling that sales through ReDigi's website infringe Capitol's exclusive rights to the reproduction and distribution of its content.

ReDigi, which runs an online marketplace for reselling pre-owned digital media, claimed to have in place technology that ensures that the music being resold has been bought legally, and also that the file has been deleted from the seller's device.

The file is not deleted automatically or involuntarily, though ReDigi's policy is to suspend the accounts of users who refuse to comply, the judge noted.

The judge also dismissed a defense under the first sale doctrine, and said the first sale defense is limited to material items, like records.

The first sale defense would, for example, cover the owner's sale of a particular "phonorecord," be it a computer hard disk, iPod, or other memory device onto which the file was originally downloaded, the judge said.

"Here, ReDigi is not distributing such material items; rather, it is distributing reproductions of the copyrighted code embedded in new material objects, namely, the ReDigi server in Arizona and its users' hard drives," he wrote.

Electronic Frontier Foundation described the ruling as a blow to the future of the first sale doctrine. "What is particularly frustrating is that the court reached that decision despite the fact that ReDigi went out of its way to prevent actual harm to any copyright owner," the online rights group added.

ReDigi also said it was disappointed with the decision but pointed out that the ruling only affected ReDigi 1.0, its original beta launch technology, which has been superseded by ReDigi 2.0 that the court stated was not affected by its ruling. The judge said that ReDigi 2.0 was not considered in the action as it was launched after the Capitol complaint and days before the close of discovery.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is [email protected]